Valero shuffles terminal business

30.03.16. Valero Energy Partners LP has announced that the board of directors of its general partner has approved the partnership’s acquisition of the McKee Terminal Services Business from a subsidiary of Valero Energy Corporation for US$240 million. The transaction is expected to close effective 1 April 2016.
The terminal business comprises 75 tanks with 4.4 million barrels of storage capacity for crude oil, intermediates and refined petroleum products.
The partnership expects to finance the acquisition with $139 million of borrowings under its revolving credit facility, $65 million cash, and the issuance of additional common units and general partner units to Valero subsidiaries, valued collectively at $36 million. The newly issued units will be allocated in a proportion allowing the general partner to maintain its 2 percent general partner interest.
On closing, the partnership plans to enter into a 10 year service agreement with a subsidiary of Valero. The acquisition is expected to contribute around $28 million of EBITDA in its first 12 months of operation.